Kim Landers reports from Washington

Transcript

TONY JONES, PRESENTER: To bring us up to date with the latest developments we're joined by our North America correspondent Kim Landers in Washington.

Now Kim, in the cold light of day after all this market chaos, what's been the political and the popular fall-out after this vote?

KIM LANDERS, NORTH AMERICA CORRESPONDENT: Well, there's still a sense of disbelief that the US House dealt this bail-out bid such a death blow. But political and business leaders agree that doing nothing is not an option. They're now scrambling to try to revive a rescue package.

There is a lot of fear and very sobering thoughts here in Washington and on Wall Street about just exactly what could be next.

TONY JONES: OK Kim, where does it go to from here, the deal I mean?

KIM LANDERS: Well, that's a very good question, because Congressional leaders are now, as I said, scrambling to put something together. We will hear from the President George W Bush shortly, however all his Presidential persuasions simply hasn't been working. There are some suggestions that there will be a lot of meetings behind closed doors over the next couple of days while the US House is on a break for a Jewish holiday, to try to, sort of, figure out what to do next.

But, really, what these US politicians have got to get over is the fact that this deal was very unpopular amongst Americans. They just could not get over the fact that to them this seemed to be an undeserved bailout for the rich and reckless investment bankers on Wall Street. They didn't like it; they took to the streets protesting against it. And when push came to shove in the US House yesterday those politicians, they know that a presidential and congressional election is just five weeks away, and they saved their political hides first.

TONY JONES: Indeed. And if President Bush is seeking to persuade them to think again, he's got a lot of trouble because he's a lame duck.

So, I see that Wall Street... the Wall Street Journal I should say, seems to be pinning its hopes on the Senate; they want Republican Senators who feel better about the deal than their colleagues in the House to actually do something about this. Is that likely to happen?

KIM LANDERS: Well, the Senate was always involved in these discussions. The Senate leaders were part of this. You've got to also remember their presidential candidates John McCain and Barack Obama are both members of the Senate. Some people said that when they were called into the negotiations last week, that that set those negotiations back a bit. It is possible that the Senate might try to come up with its own package. But there are also reports that they will really want this to start in the House.

That is where all the trouble has been; they are the people that are struggling to pass this. And so perhaps the Senate might just say look 'You guys sort it out, you bring us something that you think you can pass and then we'll go from there'.

TONY JONES: OK, and just under an hour from now Wall Street's going to open again. What are the futures showing as any sort of indication?

KIM LANDERS: Well, it looks like the stocks are going to rebound after their biggest single day loss yesterday. The Dow Jones Futures is up about 156 points, about 1.5 per cent. Tony, as we know, when there's Wall Street carnage there are also bargain hunters.

TONY JONES: Ok Kim, we'll leave you there. Thanks very much for bringing us up to date on that. And Kim we'll actually be back on Lateline Business as Wall Street opens.